Turkey’s PMI Rises to 44.3 in October
Turkey’s PMI rose for the first time since July, with October’s reading of 44.3 higher than 42.7 in September. Any figure greater than 50.0 indicates overall improvement of the sector.
Latest PMI survey data from Istanbul Chamber of Industry and IHS Markit signaled that while the health of the sector eased again in October, the latest slowdown was less marked than that seen in September. A more stable exchange rate scenario led rates of inflation for both input costs and output prices to slow markedly over the month. Output, new orders and employment all moderated to lesser extents in October.
The headline Istanbul Chamber of Industry Turkey Manufacturing PMI is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Business conditions as of October have now moderated in each of the past seven months.
A stabilization of the lira exchange rate helped lead to a marked slowdown in the rate of input cost inflation in October. This was also the case with output prices, which increased at the weakest pace since March.
Output and new orders continued to slow in October amid challenging market conditions, but in both cases the rate of moderation was less marked than in September. New export orders eased for the second month running, and to a greater extent.
Manufacturers responded to slower demand conditions by scaling back their employment and purchasing activity. That said, in line with the trends in output and new orders, rates of moderation were weaker at the start of the fourth quarter.
Further difficulties in supply chains were signaled in October, with vendor delivery times lengthening to the greatest extent since the survey began in June 2005.
Latest PMI data suggest that the worst of the current difficulties may have been seen in September, with key indicators such as output, new orders and employment all moderating at weaker rates in October amid a slowdown in inflation. That said, market conditions remained challenging for firms and further improvements would be needed in coming months if return to growth is to be seen.